CHAPTER XV 



(Hast of drafattns Cdont 



^^HE selling price of every product of human labor, 

 i 1 1 the production of which is open to general com- 

 ^^ petition, is in the end determined by the average 

 cost of producing that article. The truth of this 

 rule is most clearly shown in the case of those articles 

 of manufacture in the production of which the element 

 of chance is most completely removed, and an exact 

 knowledge of the cost of material and labor entering 

 into their composition is possible. Where such absolute 

 accuracy is possible, the producer simply sums up the 

 cost to himself and fixes a selling price so as to allow as 

 large a margin of profit as competition will permit. 

 The application of this rule to the products of the farm 

 appears difficult because of the difficulty of measuring 

 the cost of producing any given product, but that it 

 does apply is certain, and is illustrated by the declining 

 course of prices of farm products that accompanies the 

 increased use of labor saving farm machinery. 



It is not possible to measure cost of production 

 of farm products with the same accuracy as is possible 

 with manufactured articles, but every farmer should 

 know approximately at least what his own products 

 cost. If he does not he is no position to market them 

 intelligently and is assuming risks which no other 

 business in the world carries. It is remarkable how 

 little data of positive value bearing upon the cost of 

 producing corn are available. Most that has appeared 

 is in the way of loose general estimates based upon 

 small areas grown in an experimental way, though 

 within the past few years some careful and systematic 



